A Significant Increase to OSHA Penalties Is Coming

For the first time in 25 years, the Occupational Safety and Health Administration (OSHA) will increase its fines for safety violations. The proposed changes were not widely publicized because they were included in the Bipartisan Budget Act of 2015 (H.R. 1314). This bill was pushed through approvals expeditiously to avoid a default on the nation’s debt. Approval of the final bill also coincided with the process of selecting a new Speaker in the House of Representatives.

President Obama signed the Bipartisan Budget Act of 2015 on November 2, 2015. Section 701 (entitled Civil Monetary Penalty Inflation Adjustments) of the Bipartisan Budget Act of 2015 requires OSHA to begin indexing its penalty limits to inflation and it also includes “catch-up” provisions. This “catch-up” provision allows OSHA to enact a one-time “catch-up” assessment that will increase penalties to reflect the changes in inflation from 1990 - 2015, with a cap at 150%. This makes it possible for the existing $7,000 penalty limit (for other-than-serious and serious violations originally set in 1990) to be increased to approximately $12,477 per violation, and the existing $70,000 penalty limit (for willful and repeat violations) could now be increased to approximately $124,765 per violation.

The last time OSHA’s penalties increased was under the Omnibus Budget Reconciliation Act of 1990. That law increased OSHA’s authorized penalties from $1,000 to $7,000 for Serious and Other-than-Serious violations and from $10,000 to $70,000 for Willful and Repeat violations. Until now, OSHA was exempt from a requirement that federal agencies increase fines to mirror inflation. The 2015 Penalties Act also mandates annual inflation increases for OSHA penalties, just like other agencies do now.

This change applies only to those states under federal OSHA jurisdiction, but state-plans can be expected to follow suit.